Romanian government postpones decision on motor tax amendment for a second time

The Romanian Government postponed its decision on the amendment of the taxation system currently applicable to local car owners following a request filed by Minister of Environment Rovana Plumb during a meeting of the executive body held on Wednesday (January 9 ), according to Mediafax news agency.

The decision was motivated by the fact that this is a very important change, according to a statement of Vice PM Liviu Dragnea. Dragnea was not able to provide a definite term for a new taxation system to come into effect, but expressed the Executive’s hopes that it will happen as soon as possible. As a result of this, car owners will remain bound to pay the first registration or the first sale taxes currently in force. PM Victor Ponta recently announced a planned replacement of the motor tax with a variable environmental stamp duty, which would have owners of old and polluting vehicles paying more and owners of new, environmentally friendly cars paying less to the State. The motor tax was introduced by the Government in April 2008, with a calculation formula based on the technical data of each car, namely cylinder capacity and carbon dioxide emissions. The value of this tax has been adjusted several times since then. In 2011, it underwent an average 45-50 percent increase, with the payable sum doubling or even tripling in size for highly polluting cars, according to gandul.info. In 2012, the tax level fluctuated downwards with a maximum reduction of 25 percent. Government estimates place State revenues from the motor tax collected from 2009 to 2012 at approximately EUR 1 billion (RON 4.5 billion), as reported by gandul.info. This money was transferred into the Environment Fund, set up to finance environmental protection projects. On the down side, legislative slippages have also caused the State to lose money on account of the illegal collection of such tax. In August last year, PM Victor Ponta announced that the Romanian State must pay a total of EUR 400 million as compensation to wronged car owners. PM Ponta also stated that approximately 80,600 cases were filed with the Romanian courts in 2011 and 2012 seeking the restitution of the wrongly collected motor tax. The proposal for the introduction of a duty payable on the first sale of a car dates back to PM Emil Boc’s mandate, end of 2011. Met with determined protests, the enforcement of this measure was then postponed until the beginning of this year. Ioana Jelea, ioana.jelea@romania-insider.com photo source: sxc.hu